Thursday, April 05, 2007
Bank holds at 5.25%
Posted by David Smith at 12:15 PM
Category: Thoughts and responses

It must have been close, but the Bank of England's monetary policy committee held Bank Rate at 5.25%. No statement was issued, as is customary after a "no change" decision. A May hike is still on the cards but if it was 100% certain presumably it would have happened today.

Comments

Hi

I suspect it would have come down to the CPI number they have seen, although they would deny this.

My hunch is March CPI number will surprise on the downside.

Posted by: Kingofnowhere at April 5, 2007 12:47 PM

We don't get the CPI until April 17, so they won't have had a sneak preview this month.

Posted by: David Smith at April 5, 2007 03:16 PM

Hi

Yes, so I have been informed. I'll have to think of another reason they didn't hike then, maybe they just don't think we need anymore rate increases. After all with inflation about to fall, the real rate of interest will rise.

I see the CEBR, now have the CPI at 1.9% in July.

Posted by: Kingofnowhere at April 5, 2007 03:50 PM

Someone in the Bank has probably looked at Sandid's charts (forum).

However, they probably do this by expenditure grouping, enabling forecasting where some changes are known, such as gas prices and the budget changes. This would give a range of possibilities (maybe a fan chart?) for what the CPI is likely to be when they don't have actual information.

On the other hand they may just have decided to wait for the figures....

Posted by: paulbiv at April 6, 2007 06:40 PM

Good job TVs, DVD players and Sat Navs are coming down to help the CPI figures, nevermind food or shelter (increasing above inflation for sometime), we don't need those.

Any bets that Danny Blanchflower voted for a hold or a cut?

Posted by: Kev M at April 10, 2007 11:08 AM

Hi

I wonder if this had any bearing on them?

http://www.niesr.ac.uk/pubs/searchdetail.php?PublicationID=1477

We project that the output of the economy in the three months ending in February was 0.5% higher than in the previous three months. This follows a revised figure of 0.7% for the three months ending in January. The main factors behind the slower growth of the economy are that the growth rates of both public and private sector services output seem to have been lower than they were late last year. If this pattern persists, then the pressure on the Bank of England to raise interest rates again is likely to be lower than we had anticipated a few weeks ago.

Just a though?

Posted by: Kingofnowhere at April 13, 2007 12:20 PM
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